Ontario’s Power Trip: Dalton McGuinty, power puppeteer – by Parker Gallant (National Post – November 2, 2012)

The National Post is Canada’s second largest national paper.

 Premier’s Office overwhelmed bureaucrats on gas-plant scandal

The 56,000 pages of documents associated with the Ontario government’s decision to kill two gas plants originally planned for Mississauga and Oakville show clearly the top-down role of politicians, both in the decisions made and in the attempts to hide the costs. They show, in numerous instances, how Premier Dalton McGuinty was in absolute control through his cabinet ministers to the officials he had appointed to the agencies involved.

As I read the documents so far, including board briefings and emails among the many players, it’s the Liberal strategists attached to the Premier’s Office and Ministry offices who are invested in hiding the mess the gas plants created. As energy consultant Tom Adams suggests in his review of the documents, the evidence suggests the total cost of plant cancellations is likely greater than $1.3-billion, the burden to be borne by electricity consumers.

The documents show that McGuinty strategists managed the gas files to benefit the Liberal party rather than taxpayers and ratepayers. Once the plants were cancelled, in October 2010 and September 2011, the top-down political influence is very noticeable. Post-cancellation negotiations to cover the costs of breaking contracts fell to Liberal party officials who tried to cover up the mess, not to energy experts.

One early sign of the Premier’s Office control came early, in November 2010, a month after the government announced it would cancel the $1.2-billion contract to TransCanada Energy (TCE) to build the 900-megawatt Oakville plant. One of the 56,000 documents is a presentation made to the board of directors of the Ontario Power Authority (OPA), the agency that runs the provincial power system under government oversight. One slide in the presentation captures the essence of the issues:

Premier’s Office staff advised TCE that Ontario has other needs for gas-fired generation

-OPA staff [is] advised that Province would be pleased if the following or a combination of the following criteria were achieved:

-Negotiated solution does not exceed $1.2 B

-No cheque issued to TCE

-Good location for replacement facility (i.e. rural and meets setback requirements of Bill 8)

-Per unit cost close to that of similar generation technology…”

Regarding the Oakville plant, therefore, it looks like the Premier’s Office is well aware of the liability created by cancelling the TCE contract, and that it wants a settlement that “does not exceed” $1.2-billion — the cost of the plant — and that “no cheque” is to be issued to TCE. What we now know, however, is that while no cheque was issued, TCE was awarded another site in Bath, Ont., and other concessions. No cheque was issued by the government, but ratepayers will be paying through their electricity bills.

Among the strategists on behalf of the government was David Livingston, then the CEO of Infrastructure Ontario. Mr. Livingston, now the premier’s chief of staff, used Infrastructure Ontario staff to put together “term sheets” that would be used in negotiations with TCE.

For the rest of this column, please go to the National Post website: http://opinion.financialpost.com/2012/11/01/ontarios-power-trip-dalton-mcguinty-power-puppeteer/

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